Q. I would be very grateful for your advice. I have paid contributions to the NHS from 1982-2003. I sold my practice in 2004 after a sudden death of my husband. I no longer work under the NHS. I planned to take out my pension at the age of 55 (2009) and I hoped it would be index-linked.
Will the situation be different and affected by the recent changes and when would you advise me to start to take out my pension if I could postpone it?
A. If you take the NHS pension at 55 it will be subject to the Voluntary Early Retirement penalties of 25% on the income and 14% on the lump sum. The income amount you receive will be taxable and will be indexed.
The main thing you’ll need to think about is whether or not you NEED to take the pension benefits. Do you have other assets that you can live off for example? The ideal position to be in is if you can defer until age 60. It’s really important that you get your strategy right on this one as once you start drawing the pension the decision can’t be reversed.
When we do this analysis for clients we use forecasting software that enables us and the client to see how certain decisions will affect their future BEFORE they implement that decision. I wouldn’t recommend making any decisions without going through this process.
I hope this helps!
If you’ve got a question you’d like to ask us just contact us and we’ll email you an answer (if we publish it we’ll keep your name anonymous).
